One of the joys of your own blog is that there is no editor to reject your contribution. (The corresponding downside risk is that there is no one to tell you not to be so bloody stupid.)

Last week, I wrote a letter to The Economist. I responded to a column entitled "What there is to learn from the Soviet economic model: Even today, some see it as a way to kick-start industrialisation." The column correctly pointed out that the Soviet way of doing things incurred heavy human and social costs. Nonetheless I felt it missed something. I wrote and said so, but my letter did not make it into this week's issue. Exploiting the prerogative of the blogger, I publish it here:

Sir

Jawaharlal Nehru asked whether the Soviet economic system could be “shorn of violence and coercion” (What there is to learn from the Soviet economic model, Nov. 9, 2017). Your correspondent correctly answers “No,” but, like Nehru, fails to grasp the reason. Nehru tried to understand the Soviet economy as a civilian project for economic growth and development. This was his mistake. The Soviet economy’s quantitative controls, priorities, and shortages, were the features of a war economy. The Bolsheviks’ first model was the German economy of sacrifice and mass mobilization for the Great War. Lenin expected to improve on the German outcome by dispensing with private property and the rule of law. The Soviet economy’s comparative advantage lay in supplying the means of national power in the age of mass armies. This advantage was revealed not in global market shares but in the global balance of power, where the Soviet Union was much more successful than its second-rate economy would have predicted. That is why the idea of it retains appeal for Russian nationalists in times of international tension.

October 28, 2017

This column appeared (in Spanish) on 28 October on the website of El Independiente.

Soviet economic institutions were inspired by two western economic models of the early twentieth century. One was the German war economy of the Great War, which Lenin observed and admired for its government priorities, the control of supply chains by committees of industrialists, the rationing of commodities at fixed prices, and obligatory labour mobilization. The other was the American system of mass production of standardized products in great factories under centralized management.

Combined with an authoritarian single-party dictatorship, these two models made the Soviet economy as it emerged under Stalin and persisted until 1991. Everything was designed for mobilization, production, accumulation, and expansion. To ensure this, the state owned nearly everything and directed nearly everything from the centre, either by decree or by pressure to conform, backed up by the secret police. The citizens were motivated to comply with authority by a mixture of patriotic appeals, fear, and meagre rewards. The economy could supply basic consumer goods and services, but its special advantage lay in supplying the means of national power in the world, especially a mass army with vast quantities of standardized weapons. By the outbreak of World War II, Stalin’s Soviet Union had become one the world’s two leading producers of armaments, the other being Hitler’s Germany.

The Soviet economy was capable of growth, but it never proved capable of catching up with the innovative market economies of the time. Moreover, the growth rate of the Soviet economy steadily deteriorated through the postwar period. From the mid-1970s, the Soviet Union was falling further behind the United States in productivity and prosperity. While its economy began to stagnate, the Soviet Union faced additional challenges of the time. One challenge arose from the U.S. rearmament under Presidents Carter and Reagan. Another arose from the self-imposed burden of the Soviet Union’s entanglement in Afghanistan. In the international economy the Soviet Union was reliant on the oil market, where prices collapsed.

The Soviet leaders made repeated efforts to overcome economic constraints through reforms. The reforms sought to raise productivity by decentralizing management and improving incentives for efficient behaviour, while retaining the framework of state ownership and the party monopoly of power. All such reforms failed, as the economy reverted to its basic type. Later, the Chinese leader Deng Xiaoping would say that the last Soviet leader, Mikhail Gorbachev, was a fool for abandoning the party monopoly of power without reforming the economy. But this was unfair. Gorbachev did so only after all economic reforms had been tried, including most of the reforms that had been tried out successfully in China. Why they failed in the Soviet Union is an important story, but one for another time.

The end of the Soviet economy cannot be explained by economic factors alone. This should be clear from the example of countries like Cuba and North Korea, where ruling parties are facing vastly greater economic problems and threats than the Soviet Union ever faced, yet regimes have not collapsed. In the case of the Soviet Union, politics was decisive. The conservative generation of leaders such as Leonid Brezhnev, born in the early twentieth century, died out. A new generation took command, led by Mikhail Gorbachev. The new generation was more open-minded, and their open minds had been influenced by the ideas of the dissident movement – nationalist, liberal, or social-democratic. Gorbachev was decisively influenced by ideas about social democracy and rule by consent. He did not want to rule at any price, or to rule by fear. Once it became widely understood that resistance to power would not be punished, people stopped being afraid. The Soviet Union became ungovernable and fell apart.

Politics was decisive in the moment, but at the same time we should not ignore the deeper economic forces. The Soviet economy was designed for a world of mass production and mass armies. That is no longer the world in which we live. In the 1970s, the information revolution gave rise to flexible production and a services economy based on information sharing. In the same decade, precision guidance and miniaturized nuclear weapons put an end to the idea that the future of Europe could be decided by a great battle fought by thousands of tanks and planes and hundreds of thousands of soldiers in the central European plain. The world for which the Soviet economy had been designed was disappearing. The Soviet Union had no future. No one should want to see it return.

October 20, 2017

I woke up on October 16 to a learned debate on Twitter about economic history. Daniel Hannan, who is a Conservative Member of the European Parliament, had posted this:

What made us the world's richest nation? We removed trade barriers and so put money into ordinary people's pockets.

In response, Nick Dearden, who is the director of Global Justice Now, a campaigning organization, replied:

No. We plundered & pillaged. We sold people by the millions. We forced China into opium addiction. We decimated Bengal's textile industry.

(At the time of writing, both of these tweets were well liked, with Dearden well ahead: Hannan 982, Dearden 1.9K.)

Maybe you've guessed: this dispute was not really about economic history. It's about Brexit. Hannan urges Britain to go it alone as a free-wheeling, free-trading nation state, as in the past; that, he maintains, is what made us rich then, and it will work for us again. Dearden maintains that we owe Britain's wealth to the world, from which we once stole it. I'm not sure what that implies for Brexit, but for sure he doesn't seem to like free trade.

Considered as economic history, which version is more plausible? Neither account would pass even a low bar, say, that of an undergraduate multiple choice test. But, of the two, I prefer Hannan's. Here's how that works:

Why Hannan would not pass: he is wrong to imply that free trade was the key factor. Britain's relative advantages can be dated at least back to the fourteenth century, long before free trade; in fact, long before foreign trade represented a substantial share of Britain's economic activities.

Why Hannan deserves some credit: he is right to suggest that in the nineteenth century free trade further promoted British productivity and prosperity. He is also correct to remind us, as many forget, that trade is primarily about wages and prices, and that the gains from trade stem from higher productivity in the jobs we have, not from more jobs.

Why Dearden would fail -- on every count. Plunder, pillage, and the slave trade have little or nothing to do with Britain's modern competitive advantages. These advantages stemmed from factors that came into play long before the eighteenth century. Even in the eighteenth century, Britain's foreign predations were not on a sufficient scale to explain the continued growth of the economy at home, for at that time the total of foreign transactions was not large enough relative to the size of the economy, and all profits on trade did not represent a significant share of British investment.

At home, the revenues from British colonies and plantation enriched a few, but they did not generate economic growth. Britain's industrial revolution was made by mill owners and ironmasters, who were not especially enriched by their entrepreneurship because competition continually drove down their prices and profits. Those enriched by the cotton trade were the many who gained from falling textile prices and cheap imported food.

That's at home; what about the rest of the world? The cotton trade did not only enrich Britain. It also enriched others. It did not, as Dearden claims, "decimate Bengal's textile industry." That was done by Indian mill owners. In India as in England, some lost but many gained. This is shown by the fact that, throughout India's so-called deindustrialization, both production and consumption of textiles rose decade by decade.

So . . . if Hannan had the better case for Britain to have embarked on free trade in the nineteenth century, does he have the stronger case for Britain to leave the EU in the twentiy-first? Absolutely not.

The gains from free trade in the nineteenth century arose from exchanging basic staple commodities: food and raw materials, textiles, and simple machinery. These goods could be described by simple standards, and contracting for them was largely free of regulation. Trade in the twenty-first century is radically different.

Today, trade in complex machinery and electronic devices relies on common standards for quality, safety, and networking. Trade in services, where there are the greatest unrealized gains, relies even more on common regulatory standards for consumer protection and contract enforcement. These things are not provided by the WTO, or by free trade, or by free trade agreements. They are provided by international regulatory harmonization, such as by the EU's Single Market.

If you want to import, you have to export. By leaving the Single Market, we throw up a trade barrier between ourselves and our largest, most competitive market.

So, to the extent that Hannan is correct on free trade, his is a powerful argument against Brexit.

More generally, the exchange between Hannan and Dearden illustrates how the desire to defend or attack prompts the opposing sides to oversimplify history and to spread half-truths and "alternative facts." Partisanship makes idiots of us all.

October 13, 2017

In August this year Filip Novokmet, Thomas Piketty, and Gabriel Zucman circulated a new working paper, “From Soviets to Oligarchs: Inequality and Property in Russia, 1905-2016” (NPZ 2017a, b). This paper makes several advances, including a novel estimate of the evolution of Russians’ offshore wealth.

To situate the subject briefly, Cold War scholarship has left us a substantial literature on income inequality under communism. Bergson (1944), Yanowitch (1963), Wiles and Markowski (1971), Pryor (1972), Wiles (1974, 1975), Wädekin (1975), Chapman (1977), McAuley (1977), and Matthews (1978), each made valiant attempts, sometimes extending to piecemeal comparisons over countries and over time. “Considering the obscure data with which they had to work,” a survey by Schroeder (1983) remarked, “Western investigators display a large degree of agreement.” Measured by the decile ratio, the distribution of official incomes in the Soviet Union was becoming more equal over time and was substantially more equal than in the developed market economies then available as comparators. Schroeder noted, however, that Western researchers could not access data on the Soviet distribution of illegal incomes, or on privileged distribution of goods and services including accommodation and health care.

More recently, Lindert and Nafziger (2014) made an advance in another direction, examining inequality in Russia before and after the Soviet era. They concluded that pre-tax income inequality in 1997, although likely understated by official reports, was greater than in 1904.

Finally, a new paper by Allen and Khaustova (2017) examines Russian real wages in the long run. This paper does not address income inequality directly but allows inferences to be drawn from comparing real wages and productivity in industry. They find that real wages stagnated from the 1860s to 1913 (in St Petersburg, the capital, and Kursk, a provincial centre) or showed modest gains (in Moscow) but lagged everywhere behind productivity, suggesting a movement from wages to profits and income from wealth. After the troubled wartime and revolutionary period, the 1920s brought large real wage gains. These were short-lived, evaporating in the famine-led inflation of the early 1930s.

Novokmet and co-authors (NPZ) are the first to have tried to measure wealth and income inequality in Russia over the whole twentieth century. And, as many readers will be aware, their paper is part of a much larger collaborative project, the World Inequality Lab and the associated World Wealth and Income Database, one that aims to measure inequality in many countries over hundreds of years.

Here I focus on income inequality:

Income shares in Russia, 1905-2016 (selected years): bottom 50 per cent and bottom 90 per cent

Source: Novokmet, Piketty, and Zucman (2017a,b).

According to NPZ, the share of the top 10 per cent in pre-tax income distributed to adults in Russia was 47 per cent in 1905. The share fell to 22 per cent in 1928, increased modestly to 26 per cent by 1956, and began to fall gently back again, reached a low of 21 per cent in 1980. (The Soviet-era years observed are 1928, 1956, and then roughly every second, third, or fourth year to 1988, when annual observations begin.) By 1996 the top 10-per-cent share had returned to the 1905 level and remained in that vicinity through 2016. NPZ comment: “our benchmark estimates suggest that inequality levels in Tsarist and post-Soviet Russia are roughly comparable. Very top income shares seem if anything somewhat larger in post-Soviet Russia.”

Measured by the top 10-percent income share, Russia today appears in the World Inequality Lab database in the same inequality band as the United States and China. Income inequality is reported as greater in a few countries: Turkey, India, South Africa, and Brazil. All north and west European countries that are represented in the database are more equal than Russia. But all are smaller than Russia in population, and a larger population will always tend to show greater inequality, because unequal economic outcomes are promoted by heterogeneity of all kinds, and heterogeneity is inevitably increasing in population size.

In its time the Soviet Union, in contrast, was apparently one of the most equal countries in the world. This is particularly striking, considering the large size of the Soviet population, 288 million by 1991. Other countries in the WID dataset with top 10-percent shares of 26 per cent or below at any time from 1917 to 1991 are few, and they are also much smaller in population: Australia, Denmark, Mauritius, Italy, New Zealand, Norway, Portugal, Sweden, and Taiwan. Of all these countries, only Italy’s population had reached 57 million by 1991, and Taiwan’s 20 million.

These results are broadly consistent with the earlier research described above. They confirm that income inequality in Russia after the Soviet era was comparable to before the Revolution, if not greater; that the distribution of Soviet official incomes was markedly more equal than in most market economies at the time and today, and in Russia beforehand and today; and that, within the Soviet era, inequality followed a modest Kuznets curve, rising, then falling.

Seen in this light, Soviet institutions and policies appear distinctly pro-poor. Before we take that as settled, however, there are three issues that point the other way.

First, in the Soviet era the poor might have gained relatively, but the chief factor in this was impoverishment of the rich. What the rich lost was not transferred to the poor, or was given only temporarily before the state grabbed it back, as clearly implied by Allen and Khaustova (2017). NPZ measure inequality by shares of income distributed to adults. In the Soviet era, the share of income not distributed to adults, but retained by the state, became unusually large. As a first approximation, household consumption fell from around 80 per cent of GDP in 1913 to around 50 per cent in 1940 and through the postwar period. By implication, what the rich lost was diverted into government administration and investment and defence projects; it was not passed on to the lower income strata. If there was an initial transfer to the poor, it was confined to the 1920s, and was then cancelled in the Great Breakthrough of Stalinist collectivization and industrialization.

Second, the Soviet state did not take only from the rich. It took also from the poor, including the poorest. This applied particularly in the years from 1928 to 1956, a period for which the NPZ dataset has only gaps. While I cannot find full explanation on this point, the NPZ dataset (like most Cold-War scholarship) seems to rely on reports of the distribution of official wage earnings to capture Soviet-era inequality. Wage earnings accounted for less than one third of Soviet household incomes in 1928, just over 60 per cent in 1937, and nearly 70 per cent in 1956 (Kashin and Mikov 2004: 17, 23, 34). The largest category of households excluded from reports of wage earnings were collective farmers – the great majority of Soviet farm workers – who received an uncertain dividend, not a wage. If that is the case here, then the rural poor are left out of account. (Forced labourers are also left out. There were millions of these from the 1930s to the 1950s. But they are a small omission compared with many tens of millions of collective farmers.)

Narrative accounts of rural food shortages and periodic famines indicate that rural poverty contributed substantially to Soviet-era inequality before the 1950s (e.g. Davies and Wheatcroft 2004). After that time, the compensation of collective farmers moved gradually, but never completely, towards public-sector standards.

Finally, as NPZ acknowledge, under Soviet arrangements, persistent shortages and privileged distribution decoupled consumption inequality from income inequality. In the Soviet Union everyone had an income, but not everyone could spend it on the same terms. A privileged class of insiders – the party elite and the employees of key production and service establishments – who had access to relatively high-quality goods and services at prices fixed below the market-clearing level without waiting. Others had limited access to staple goods and services, for which they either waited in line or paid a higher, sometimes illegal price. As long as the poor had money they could not spend, or faced higher prices to spend it, it is possible and even likely that consumption was distributed more unequally than income. This contrasts with the pattern that has been found to prevail in market economies, where consumption inequality is generally less than income inequality. But comprehensive data on Soviet consumption inequality would seem far more difficult to come by than income data, so this may well remain a conjecture.

Consumption inequality was important not only for ex post evaluation of economic welfare under Soviet arrangements. It was of central importance to the political economy of the time. During the 1930s, as Paul Gregory (2004: 76-109) has noted, Stalin received regular reports of discontent and falling effort among the workers in the provinces and intervened from time to time to improve their condition. When he did so, he did not order their wages to be raised because, in a supply-constrained economy, this would only have lengthened local queues. Rather, he ordered consumer goods in short supply to be redirected to the towns and factories where dissatisfaction was rising, so that the workers could more easily spend their wages.

The existence of unofficial incomes in the Soviet era only adds complexity to the problem. We guess that unofficial incomes were substantial but of time-varying size. Anecdotes on who received them are plentiful. The Soviet central bank compiled annual estimates of their aggregate size (Kashin and Mikov 2004), but we continue to lack (and may never find) data on their distribution. Thus, it is impossible to say whether their net effect was to increase or reduce the extent of inequality of different kinds.

To summarize, the extent to which Soviet institutions favoured the poorest in society is easily overstated. The impact of the Bolshevik Revolution was to flatten the distribution of wages. On that official measure income inequality fell sharply. But non-wage earnings were likely distributed more unequally than wages. Unofficial incomes also mattered; how they mattered is unclear. Consumption inequality mattered too, and arguably mattered more than income inequality. Most likely, consumption inequality did not fall to the same extent. Whereas consumption inequality in market economies is relatively stable, it is possible that Soviet consumption inequality was volatile, spiking in particular years of crisis.

Any judgement on new work must be preliminary, but my thoughts so far are as follows. NPZ (2017) is a substantial contribution. It is not the first word on the subject, and it will not be the last word either. It turns a new page and sets a new challenge.

References

Allen, Robert C., and Ekaterina Khaustova. 2017. “Russian Real Wages Before and After 1917 in Global Perspective.” University of Oxford: Discussion Papers in Economic and Social History no. 158 at https://ideas.repec.org/p/oxf/wpaper/158.html.

July 25, 2017

CAGE (Warwick's ESRC Centre for Competitive Advantage in the Global Economy) has just published the summer issue of its excellent Advantage Magazine. Claire Crawford asks: "Does offering more free childcare help parents work more?" Luigi Pascale writes about "Globalisation and economic development: A lesson from history." Nick Crafts ponders: "Building a new industrial strategy ... on shaky foundations?" Sascha O. Becker, Thiemo Fetzer and Dennis Novy discuss "Who voted for Brexit?" And Daniel Sgroi explains new work on "Measuring historical happiness using millions of digitised books." The last word, entitled "Parting Shot," is mine, and I reproduce it below.

Scholars involved in evidence-based policy research are sure to be concerned when “alternative facts” and “fake news” take over the agenda. By that, I mean more than just selection of the facts in a biased way. This is commonplace, and the expert’s task has always been to sift the data to correct for such biases. A more difficult problem is how to respond to alternative facts that are fabricated, although outrageously different from the truth, because that’s what their authors think ought to be true.

Alternative facts of the made-up kind are not new. As the economist Ed Glaeser once wrote, fabricated stories have typically spread through society in conditions of depression or defeat, when there is a popular thirst for explanation. Why has this happened and who is to blame? Foreigners, minority groups, and corporate interests can quickly become the target of “fake news” that points an accusing finger at the “enemies of the people.”

Alternative facts can emerge in any society, including liberal democracies. But the most diligent promoters of alternative facts are dictators, who are armed with the power to suppress the truth. Authoritarian rulers do this both to build support, and to expose covert resistance. Communist regimes, for example, required everyone, including experts, to salute fictitious achievements. To show scepticism or just indifference was not an option.

Exactly 80 years ago, in the spring and summer of 1937, Soviet statisticians were being arrested and imprisoned or shot because the facts they produced were in conflict with alternative facts that their rulers had authorized.

At the end of 1926, the Soviet population had been enumerated at 147 million. In the mid-1930s, to demonstrate the happy progress of Soviet society, Stalin announced an alternative fact: the population was growing every year by three million. On that basis, by the beginning of 1937, the population should have gained around 30 million people.

The 1937 census showed only half the expected increase: 15 million were missing. Why? The regime had to choose among explanations. In secret, some experts reported that Stalin’s alternative fact was wrong. There were more deaths than Stalin projected, because millions had starved, or were shot or died in prison, or fled the country. There were also fewer births, millions fewer, as a result.

More loyal officials offered another explanation: the census did not confirm Stalin’s alternative fact because the census office was captured by traitors, who aimed to discredit the party. Stalin waited a few weeks, then decided. Those who went with the facts disappeared, along with the census. Those who went with the alternative facts were promoted, and their explanation was released to the public.

This story has two messages. On the side of pessimism, it shows that the logic of alternative facts can be self-sustaining. When experts refute the alternative facts, the believers are likely to blame them as enemies, whose aim is to confuse and undermine society.

I am also an optimist. In the age of social media no information can be suppressed for decades. Yes, tyrants and despots can exploit social media to spread lies and to identify critics. Nonetheless, more scope exists today for truth-tellers in Russia and China, let alone in the West, than there ever was under Stalin or Hitler.

June 01, 2017

On Forbes on 23 May, my co-author Paul Gregory worries about America's risk of a new McCarthyism. He warns:

Joseph Welch, the lawyer for the army in the McCarthy-Army hearings brought the McCarthy Era to an end by asking McCarthy, who had gratuitously ruined the reputation of a young colleague: “Have you no sense of decency, sir, at long last?” We are beginning to see the use of these guilt-by-association practices.

In picking up this theme, Paul echoed an exchange between US President Trump and Russian Foreign Minister Sergei Lavrov earlier in the spring. As the controversy over his campaign links with Russia intensified, on 3 March 2017 (at 2:38AM) Trump tweeted that leaks of information were turning into:

Terrible! Just found out that Obama had my "wires tapped" in Trump Tower just before the victory. Nothing found. This is McCarthyism!

What is McCarthyism? For readers who are not sure what that's all about, Senator Joseph McCarthy was Republican Senator from Wisconsin from 1944 to his death in 1957. He played the leading role in a postwar search for undercover communists and Soviet agents in US public life. With or without reasonable cause, this search placed tens of thousands of people under suspicion, many of whom lost their jobs and careers, and some of whom were eventually imprisoned on criminal charges.

the practice of making accusations of subversion or treason without proper regard for evidence.

So, that's McCarthyism. Now for the parallel. Those who raise fears of a new McCarthyism suggest that we should compare today's beleaguered Trump campaign and White House officials to McCarthy's victims after the war. How well does that hold up? The comparison is reasonable up to a point. The chief similarity is the fevered atmosphere of suspicion and finger-pointing, inflamed by a widespread belief that America's public life has been penetrated by hidden enemies, who now lurk just beneath the surface of things.

President Donald Trump is about to resign as a result of the Russia scandal. Bernie Sanders and Sean Hannity are Russian agents. The Russians have paid off House Oversight Chair Jason Chaffetz to the tune of $10 million, using Trump as a go-between. Paul Ryan is a traitor for refusing to investigate Trump’s Russia ties. Libertarian heroine Ayn Rand was a secret Russian agent charged with discrediting the American conservative movement.

These are all claims you can find made on a new and growing sector of the internet that functions as a fake news bubble for liberals.

That same evening, my own Facebook feed provided a near-perfect illustration. The evening's news was that investigations into the Trump campaign's Russia links were homing in on a "current White House official" as a "significant person of interest." But who would that be? Nobody knew. I came across some comments by people, not my friends, or even friends of friends, just ordinary, good-hearted, liberal-minded Americans, whom I'll call A, B, and C:

A. Bannon I hope

B. Nope. He's not important. It's Kushner.

A. I wish it could be Pence just to get him out of the picture. So that makes sense why he got so close to top.

C. Please oh please oh please be Jared.

What struck me was not just how interested we have become in the hidden workings of the White House. It was more than that; it was the hunger and thirst for one or another hate figure to be found out for what, in our imagination, they really are -- or what we need them to turn out to be, if the hatred is to be justified.

Common to the new and old McCarthyisms is the burning desire of many to see proven what they feel they already know, in the absence of any hard evidence, to be true. We've made up our minds about Trump and his circle, and what sort of people they are. All we need is the facts that confirm it.

That is not all, however.

There is a deeper point that is buried in the history of the old McCarthyism, a problem that those who warn of the new McCarthyism appear to forget. They hold, and I agree, 100 per cent, that McCarthy and his supporters did despicable things. The McCarthyites ruined the lives of many people who had done nothing wrong. They injected a poison into American political life that persists to the present day.

But there is more. The suspicions that fuelled McCarthyism were not unfounded in fact. McCarthyism was not about nothing. And McCarthyism, in its time, was not technically a witch hunt, although I understand most of its victims felt it like that. For in fact witches do not exist, whereas the traitors that McCarthy hunted in his blind, destructive way, really existed.

Since the end of the Cold War, historians have been able to reconstruct the deep history of which McCarthyism was an evil outgrowth. During the 1930s and 1940s, particularly during World War II when the Soviet Union and the United States were allied, and so before the Cold War began, the American government was penetrated by hundreds of Soviet spies and undercover agents. It was easy for this to come about because many educated Americans had a spark of sympathy for communism, which made them susceptible to Stalin's fake news about the Soviet Union, and also because America at that time lacked the traditions and institutions of counter-intelligence.

By the late 1940s, by means of partial decryption of Soviet diplomatic cables, the FBI knew of the existence of up to a couple of hundred Soviet agents in and around a variety of government departments and projects, including the Manhattan Project. But the FBI mostly did not know who these agents were. This was because the agents' identities were protected by cover names, which the FBI could not crack except by good luck, which did come around occasionally. Meanwhile, the FBI could only protect its limited capacity to decode the Soviet signals by hiding the authoritative source of its suspicions.

Beneath the surface of the McCarthyite search for traitors, in other words, lay two things. First was a pattern of covert collusion by American citizens with the Soviet Union, a country that was operating an intelligence assault on its wartime ally consistent with a state of undeclared war between them. Second was an investigation into them that could not be completed and would remain unfinished and undisclosed for half a century. It was in this context that public suspicion and the desire to expose traitors took hold, with the destructive results that we know.

There are three clear lessons for today.

First, justice is not served when guilt is determined in advance of the facts, or when evidence is sought only to confirm prior beliefs. That is why we should worry about a new McCarthyism.

Second, calling it McCarthyism doesn't mean there is nothing there. The allegations of underhand dealing between the Trump campaign and Russia need to be substantiated or cleared out of the way, based on evidence.

Third, nothing will fuel popular suspicion more than an unfinished investigation. The investigation of Russia's role in the 2016 US presidential election needs to be seen through to the end.

May 30, 2017

You wrote to me on 25 April: “I wanted to let you know that at the General Election, to be held on June 8th, I will be standing again. I have proudly represented Coventry South for 25 years, and I believe that I can continue standing up for Coventry.”

You asked for my support. I was a Labour supporter and voter in every General Election from 1970 to 2005. I voted for you many times. Led by Gordon Brown, Labour lost my support in 2010. I see no chance of Jeremy Corbyn winning it back.

Every major party in this election has good and bad in its manifesto, and that includes the Labour Party. But Labour’s present leaders are tarnished by their past hostility to our armed forces and security services, our nuclear deterrent, and our NATO membership. Whatever they say now is compromised by their sympathy, sometimes open and sometimes poorly concealed, for authoritarian regimes, anti-semitic causes, and terrorist factions around the world.

Jeremy Corbyn has justifed his past contacts with terrorists by the necessity to talk to "people you profoundly disagree with." But there is reason to think that, at the time, he saw the terrorists he talked to not as people he disagreed with but as friends. He explains the terrorists' actions, in part, as responses to our own past foreign policies. But this carries little weight when the overwhelming majority of terrorist attacks worldwide have no such explanation.

As well as having repellent views on these matters, Corbyn and Abbot stand out as incompetent. But not all your leaders are incompetent. McDonnell, Milne, and Murray are evidently capable people. That makes them worse, not better. Their competence is sinister. I fear for our future if such people ever got their hands on the machinery of the British state. That outweighs any other reason I might have to vote for you.

Your letter states: “The country needs change.” I agree. But, just when change is needed, the Labour Party has managed to offer an alternative that is also unacceptable. The Labour Party needs change. If you would acknowledge this, you would put country before party.

May 22, 2017

In Berlin on 22 November last year, I gave a talk at the Free University in a series on the Centenary of the Russian Revolution. My title was The Stalinist Economic System. The organizers were kind enough to make a video, which has been published here (50 minutes, so pour yourself a drink first if you are inclined to watch).

For the cover slide, I used an illustration that made a big impact on me when I found it some years ago. It's the front page of Pravda on New Year's Day 1937: "Happy New Year, comrades!"

In the foreground, Stalin smiles benignly on the happy workers and peasants, who wave back at him. Advancing from the background is a column of tanks. Above them in massed formation flies a fleet of bombers. For the image was drawn from a real scene, the Revolution Day parade in Red Square in November 1936. Here's a grainy photo from that day:

(If you would like a moving version, set to the Kremlin bells and a marching band, it's here on Youtube.)

The airplanes were not just symbolic, by the way. The TB-3 was the world's first four-engined bomber. In the late 1930s the Soviet Union was building as many combat airplanes as the rest of the world put together, despite the fact that several other countries were actually at war and the Soviet Union was not.

I used these images to illustrate a simple point. Don't look at them and tell me that the Soviet project was not first and foremost about building national power. Don't tell me the first priority was the welfare of the people, or giving everyone a job or a hot dinner, or even economic growth, There was growth, and job creation, and some people did get hot dinners, but these were incidental by-products of the building of national power.

The Soviet economy was the first of its kind, a system designed for continuous war mobilization, even when there was no war. The Soviet economy and society lived under permanent mobilization, not because there was a war on, but because there might be one in future, and in order to be permanently ready for the "future war" when it arrived. Nothing took priority over that. It was the first priority under Lenin and Stalin, and it continued to be the first priority after the war, under "peaceful coexistence" and in the era of "detente."

February 10, 2017

My recent blog on torture received an interesting comment from Mr Paul Thompson. If you want to see it in the original, go here and scroll down. I thank him for it. I would have replied beneath it, but my reply turned out to be too long for the box. (One of the risks of blogging, is that there is no one to say no to you.) So, here it is, point by point:

Torture or even the threat of torture, when employed on a large scale, often leads to the victims giving up a large volume of information,

I agree.

some of which is useful for intelligence operations.

Hmm. It depends what is meant by "some." How much? Five percent? The interrogator's problem is then: which five percent? It's not enough for information to be useful. You also have to identify it as such, against the 95 per cent that is not useful. If five per cent is the proportion, the odds on identifying it correctly are just one in twenty. That's not good.

Given the relative technological backwardness of the Nazis and the Soviets, they understood well that mass torture was one the most effective methods they had available to find those of their opponents who had gone into hiding.

I have no specialist knowledge of the methods and results of the Gestapo. But the Soviets: that's wrong. The historical records of Soviet counter-intelligence suggest an entirely different story. The Soviet authorities did believe that their opponents had gone into hiding. The primary method of identifying enemies was not information gleaned through torture, but markers of social origin, kinship, acquaintance, and past behaviour. The products of torture were used mainly to confirm the "guilt" of those already identified by other means. There are many historical accounts, from Solzhenitsyn's Gulag Archipelago to Joerg Baberowski's Scorched Earth, published just last year. (Or would you believe, say, that Marshal Tukhachevskii, whose blood was found on his signed confession, was actually an agent of the Gestapo, as he confessed?)

It is a matter of common knowledge that more technologically advanced tyrannies, like modern Russia, still use torture on a mass scale,

I'll give this a pass, but I'm not happy. Even under authoritarian rule there is a distinction to be drawn between torture as a centralized policy and torture in the more decentralized form of the abuses that are enabled when the abusers know they will not be called to account. This distinction may not matter to the victim, but it is certainly germane to the instrumentality of torture. Still, for the sake of argument, let's move on.

and sometimes gain information that they deem important by this means.

That's fascinating. Is that really common knowledge? How would we know about it? (We should think about modern tyrannies that have collapsed, so that their records are available.) And, how often is "sometimes"? And, shouldn't we ask whether "the information that they deem important" turned out to have at least some external validity? I'd certainly like to know more about this.

Absolutely. (But we are not discussing torture as a punishment. We are discussing torture as an instrument for gathering information. The victim is being interrogated, not punished.)

The US political system is duty-bound to enforce the constitution,

Near enough. The President swears to "preserve, protect and defend" the constitution. Enforcement relies on the courts. See below.

so there the matter rests.

Yes, that's what I hope. But enforcement relies on the judiciary. So I am disheartened to find the President, who just swore to "preserve, protect and defend," attacking "so-called judges" and calling the courts "political." He doesn't seem to feel the call of duty as strongly as he might, and he encourages his supporters to believe that the situation calls for a strong leader willing to break rules. As I said, it's disheartening. I understand I'm not the only one to feel this way.

For all the hysteria about waterboarding, the US has not and will not ever have a policy of inflicting permanent physical harm on prisoners.

These words mislead, I think. First, they seem to limit torture to those methods that might lead to "permanent physical harm." So methods leading to physical harm that is only temporary, such as rape or the local bruising or burning of soft tissues, are not torture? And permanent psychological trauma, such as that arising from simulated execution, is also not torture?

And then "the hysteria about waterboarding." A line is drawn, apparently, between waterboarding (done before and perhaps could be done again) and "inflicting permanent physical harm" (not done, and never will be, at least as a matter of policy). But everyone can read the account of waterboarding written by my friend, the late Christopher Hitchens, who was required beforehand to sign a contract of indemnification that included the words:

Water boarding is a potentially dangerous activity in which the participant can receive serious and permanent (physical, emotional and psychological) injuries and even death, including injuries and death due to the respiratory and neurological systems of the body.

See the words "permanent" and "physical"?

Based on his experience Hitchens concluded: "Believe me, it's torture."

Perhaps you will find time to write about the mass torture and mass murder at Saydnaya prison,

Probably not. It's horrifying, of course. But my aim is to comment only when I can add something based on expertise. On Saydnaya I have none; I can add only what anyone can add who has skimmed the serious media. It's a topic on which others can add more value than me, so why should I compete with them for attention?

a rather more important topic.

Maybe. In terms of immediate human consequences, you're probably right. In terms of what is added to knowledge, perhaps not. I'm a social scientist, so I'm always interested in surprises, because by definition they tell us something we did not know. We already knew that Syrians lived under a vile tyranny. No surprise there. But to hear "What about Saydnaya" as a response to "Let's not go back to waterboarding": that's a surprise.

Before this, I always believed that US constitutional checks and balances were robust. On this matter I still hope not to be surprised.

In his 25 January ABC interview, US President Trump was asked about the use of torture in the interrogation of terrorist suspects. He said:

I have a general who I have great respect for, General Mattis [new secretary of defense], who said — I was a little surprised — who said he's not a believer in torture. As you know, Mr. Pompeo [a defender of waterboarding] was just approved, affirmed by the Senate. He's a fantastic guy, he's gonna be the head of the CIA ...

But I will tell you I have spoken to others in intelligence. And they are big believers in, as an example, waterboarding. As far as I'm concerned we have to fight fire with fire. Now, with that being said I'm going with General Mattis. I'm going with my secretary because I think Pompeo's gonna be phenomenal. I'm gonna go with what they say. But I have spoken as recently as 24 hours ago with people at the highest level of intelligence. And I asked them the question, “Does it work? Does torture work?” And the answer was, “Yes, absolutely” ...

I wanna do everything within the bounds of what you're allowed to do legally. But do I feel it works? Absolutely I feel it works. Have I spoken to people at the top levels and people that have seen it work? I haven't seen it work. But I think it works. Have I spoken to people that feel strongly about it? Absolutely.

According to a draft order on Detention and Interrogation of Enemy Combatants, obtained by The New York Times and published on the same day as the ABC interview, but as yet unconfirmed by the administration, the President intends to allow the CIA to reopen extra-territorial sites for the detention and interrogation of terrorist suspects outside the ordinary legal protections of US domestic law. The draft order specifically orders the secretary of defence, James Mattis, to carry out a review of the interrogation practices authorized by the Army Field Manual since 2006 and to modify them towards the "safe, lawful, and effective" interrogation of "enemy combatants."

Taken together, these disclosures have heightened reasonable fears that the Trump administration is on a course to restore such practices as waterboarding, if not worse.

Torture is wrong. A problem is that many Americans believe that it works. A big influence has been spy movies and TV shows based on a "ticking time bomb" fantasy in which intelligence extracted by torture saves lives. Many viewers have concluded that such scenarios are reality-based, although they are not. In reality torture is unproductive, if not counterproductive, at least on average (I don’t exclude that exceptionally it might give rise to useful information). Worse, just as depictions of torture corrupt the viewer, the practice of torture corrupts those that use it: once you start, it’s hard to stop. For all these reasons, President Trump’s reported willingness to faciliate a return to torture is reprehensible.

Still, if the President intends to change American practices, as opposed to striking an attitude for his voter base, he will encounter significant obstacles. It is notable that in his ABC interview Trump himself acknowledged the first two obstacles. One is the law, including the Detainee Treatment Act 2005, and related court rulings. Another is Mattis, his secretary of defence. Beyond that lie other resisters. His CIA director-designate is not opposed, but it seems the CIA as an organization does not want to go back there. Leading congressmen are opposed, including some Republicans. Finally, America’s allies will not cooperate.

What does Trump really want to achieve? To strike an attitude or to radically change US practices? If the latter, what price is the President willing to pay to achieve it? Is he willing to take on Congress and the courts? To sacrifice Mattis? We don't know. How strong are the checks and balances of the US political system? Again, we don't know.

I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).